Why Entrepreneurs Need a Raise

working for yourself

The only good thing about working for a boss who doesn’t compensate you fairly is that you can leave. If you’ve made a convincing case for why you should be promoted or given a raise, and been turned down (repeatedly), you are well within your rights to move to another department, accept another offer, or flat-out quit.

But when you work for yourself, you can’t quit.

Which is why, as we reach the end of another calendar year, it’s time to take a good, hard look at what you’re earning and ask yourself if it’s time you made a little more. If you work for yourself, you can do whatever you want (isn’t that the appeal of being self-employed?). And yet it’s astonishing to me how cheap we become when we hire ourselves.

Here’s a story about a colleague of mine I’ll call Jen, a self-employed PR professional in San Diego. I hadn’t seen her in years and she was coming to a trade show in New York, so we met for a drink. When she walked in, I was of course tapping away on my phone and she asked me if I was using an “app.”  

Um, yes, of course … wait a minute. What’s going on? Why is she talking about my phone as if it’s some newfangled thing that hasn’t caught on yet?

And then she pulled out a flip phone from 2007. For a moment, I thought maybe I’d slipped through a wrinkle in time. Because that would have been almost more believable than a successfully self-employed PR profesh opting out of modern-day technology. That’s when I knew this wasn’t going to be casual drinks but a come-to-Steve-Jobs meeting.

When I pressed her on it, she said that her old phone was a bit banged up but “much more affordable” since she paid around $50 a month, which made sense since the thing used Morse code.

Not being one to beat around the bush, I said, “Jen, please tell me why you, a woman who has run her own business for a decade, cannot afford a smartphone.”


Her answer? “My clients won’t pay me more.”

Turns out, my successful friend had succeeded at keeping herself within other people’s meager budgets — and living like it’s 1999. When I pushed, I found out that her “bread-and-butter client” had been paying her the same monthly rate for years — while adding more and more responsibilities.

When I asked why oh why would she work more and get paid less (inflation!), she exhibited signs of Stockholm syndrome, defending her client’s small budget and swearing her loyalty.

You know what I said? Time to find new clients.

She was falling into the painful trap of trying to convince someone what she was worth, failing, and letting it trick her into thinking she didn’t deserve more. Here are are the real things keeping you — a self-employed professional — from earning your keep.  

1. You’re selling out of your own pocket. Jen really did think her client couldn’t afford what she needed. I had this problem when I was selling jewelry as an independent rep. Because I couldn’t afford a $200 bracelet, I felt bad trying to sell other women one. But the fact is, the women at these jewelry parties did have money to spend and the thing holding me back wasn’t their money but my idea about how much was too much. My mother said wisely to me, “Don’t sell out of your own pocket.”

2. You think if you do more now, they’ll pay later. The problem isn’t just that Jen was way underpaid. She also made the mistake of doing more for them so that she could somehow convince them to pay her more. That doesn’t work.

What they saw was someone who would do all that and then some for a very low rate. It doesn’t make sense to hope someone will decide to one day pay for something they’re getting for free. So rather than do more, she should have offered more — with prices to match.

3. You feel guilt over leaving. She didn’t want to abandon a client she had been with for so long, but these guys took up so much time they were costing her new business opportunities. She didn’t give herself enough bandwidth to grow.

I told her to have a conversation with them and simply say, “I’m so glad that I’ve had the opportunity to work with you within your budget and provide the value I did for so long. I’m proud of what we’ve done together. However, I won’t be able to continue to do what I’m doing for you at the current rate, and would love to present you with a few options for how we might work together going forward.”

“Oh, but they won’t go for that,” she said. “They don’t think it’s that important.”

“Well,” I said. “You just made my argument for me.”

You care about your work, as you should. You value it, and so should the people who pay you for those services, as well as for the expertise you bring to the table. And if your clients have to be convinced that they need this or that or to pay more, you can stop pushing water uphill. Instead, let that water go where it may — down the drain. Good riddance.

This piece was originally published on DailyWorth in December of 2014.

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